Page 4005 - Week 13 - Tuesday, 17 November 2015
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The types of organisations that will qualify for the determination are those that have a predominantly charitable purpose where the aspect that would otherwise exclude the organisation from exemption is not a significant part of its activities. An example would be a health promotion organisation with a minor professional purpose. For trade, industry and commerce bodies and for professional organisations, there is little doubt that they were disqualified from tax exemptions on the basis of charitable status across all Australian jurisdictions until a few years ago. They have always been liable for territory taxes and have paid tax accordingly and fairly. However, the meaning of “charitable purpose” is rooted in common law and, therefore, court decisions in other jurisdictions have an influence on the type of organisation that can access tax exemptions in the territory, hence the need for this bill now.
The High Court case of Aid/Watch in 2010 revolutionised the Australian law on charities, and after the Aid/Watch some commerce and industry peak bodies and professional organisations took the opportunity to challenge their non-charitable status with state and territory revenue authorities. Let us call this for what it was: an attempt to make windfall gains in the form of substantial tax exemptions and refunds at the expense of the broader community.
There are now varied and confusing precedents from various courts in Australia on the question of whether peak bodies and professional organisations meet the common law definition of “charity”. A 2012 case in a Western Australian tribunal extended charitable status to the Chamber of Commerce and Industry in Western Australia. I will repeat that—a Western Australian tribunal extended charitable status to the Chamber of Commerce and Industry in Western Australia. However, last month a case handed down in the Victorian Supreme Court denied the same status to the Law Institute of Victoria, a peak professional body.
All of this is causing uncertainty in the sector and costing both the sector and the territory a lot of money in litigation costs, though the lawyers always seem to find a way through these things, Madam Speaker. Addressing this uncertainty is also why the bill prevents the commissioner making retrospective reassessments of tax for excluded organisations. This will secure revenue already paid to the territory which is now under risk from current and future court decisions.
In the long run the bill will mitigate the revenue risk caused by judicial decisions on whether a particular professional, commercial or industrial organisation is eligible for a tax exemption. I stress that the bill does not impose any restrictions on political activities of genuine charities, consistent with the High Court’s finding in Aid/Watch. This bill recognises the difference between advocacy about genuinely charitable matters and advocacy for the interests of a specific commercial industry or professional sector.
Turning to the comments of Ms Lawder, I understand there has been some discussion about the taxation treatment of community housing providers. Let me make a clear and unequivocal statement: this bill makes no changes to the taxation status of community housing providers. I repeat that: this bill makes no changes to the taxation status of community housing providers.
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